358 U.S.

133
79 S.Ct. 170
3 L.Ed.2d 172

AMERICAN TRUCKING ASSOCIATIONS, Inc., et al.,

Appellants,
v.
FRISCO TRANSPORTATION COMPANY. RAILWAY
LABOR EXECUTIVES' ASSOCIATION et al., Appellants, v.
FRISCO TRANSPORTATION COMPANY. INTERSTATE
COMMERCE COMMISSION, Appellant, v. FRISCO
TRANSPORTATION COMPANY.
Nos. 15, 16, 19.
Argued Oct. 13, 1958.
Decided Dec. 15, 1958.

Mr. Robert W. Ginnane, New York City, for appellant Interstate

Commerce Commission.
Mr. Peter T. Beardsley, Washington, D.C., for appellants American
Trucking Ass'ns et al.
Mr. Ernest D. Grinnell, Jr., St. Louis, Mo., for appellee.
Mr. Chief Justice WARREN delivered the opinion of the Court.

The issue here is whether the Interstate Commerce Commission has the power
to modify certificates of public convenience and necessity containing
inadvertent errors, and, if so, whether, in the circumstances of these cases, the
Commission could modify certificates which had inadvertently authorized the
performance of unrestricted motor carrier services by a wholly owned
subsidiary of a railroad.

Appellee, a wholly owned subsidiary of the St. Louis-San Francisco Railway

Company, is a common carrier by motor vehicle engaged primarily in the
transportation of property in interstate and intrastate commerce. The greater

part of appellee's motor carrier system was acquired in 1938 and 1939 by the
purchase of existing independent motor carriers. These purchases were made
pursuant to the predecessor of 5(2)(b) of the Interstate Commerce Act, 49
U.S.C. 5(2)(b), 49 U.S.C.A. 5(2)(b), which permits the acquisition by a rail
carrier of the rights and properties of a motor carrier if the Interstate Commerce
Commission finds that the acquisition 'will be consistent with the public
interest and will enable such (rail) carrier to use service by motor vehicle to
public advantage in its operations and will not unduly restrain competition.'1 In
1938, appellee began seeking permission to operate as a motor carrier over
substantial mileage in seven States including routes in issue here. On some of
the routes eventually acquired by appellee, the Commission authorized it to
carry on unrestricted operations. On others, the Commission imposed
restrictions limiting service to points within ten miles of the rail stations of
appellee's parent corporation or to transportation of shipments from, to, or
through certain cities. In addition, on some routes the Commission imposed
additional restrictions to assure that appellee's service would be 'auxiliary or
supplementary' to the services performed by its corporate parent. 2
3

This case concerns four of appellee's routes aggregating some 284 miles. Prior
to appellee's purchase, each of the routes was serviced by an independent motor
carrier which engaged in unrestricted motor carrier operations. During 1938 and
1939, appellee made application to the Commission for permission to purchase
the properties and operating rights of these independent carriers. Finance
hearings were held before a Commission examiner to determine whether the
acquisitions met the applicable statutory standards. Although appellee sought to
continue the acquired carriers' unrestricted operations, it represented to the
Commission in each of its applications that acquisition of the carriers would
enable it to establish coordinated truck service with the train service of its
parent railroad along these routes. A number of motor carriers opposed
appellee's applications, but the hearing examiner recommended approval of
each, subject to various conditions. Among these was the recommendation that
the authority granted be subject 'to such further limitations, restrictions, or
modifications as the Commission may hereafter find necessary to impose, in
order to insure that the service shall be auxiliary or supplementary to the train
service of the (parent) railroad, and shall not unduly restrain competition.' The
protestant motor carriers filed exceptions to the hearing examiner's report on
one of the purchases and all went to Division 5 of the Commission for action. It
reviewed the reports and adopted the examiner's recommendations including
the above-quoted condition. Although appellee had asked for authority to
operate unrestricted service, it took no exceptions to the Division reports and
did not ask for review by the full Commission. Rather, it notified the
Commission that it would consummate the approved purchases subject to the

terms prescribed, and, within thirty days of the reports, it did consummate the
transactions and commence operations.
4

Thereafter, in 1939, compliance orders issued to appellee in connection with the

four routes in question. These informed appellee that certificates of
convenience and necessity authorizing it to engage in interstate and foreign
commerce as a common carrier according to specifications set forth in the
orders would be issued as soon as appellee complied with applicable statutory
requirements, including the filing of rate publications and evidence of security
for the protection of the public. The specifications in the compliance orders did
not include the condition adopted by Division 5 reserving the right to the
Commission to take steps to insure that appellee's service would be 'auxiliary or
supplementary' to its parent's rail services.

In 1941, prior to the issuance of certificates covering the four routes, a

complaint was filed by various competing motor carriers which charged that
appellee was performing unauthorized motor carrier service which was
independent of its parent's rail services. During the course of this proceeding, a
number of certificates of convenience and necessity issued to appellee. Those
concerning the four routes in question contained no reservations of authority
similar to the ones stated in the finance hearing orders issued by Division 5. On
August 1, 1944, Division 5 entered findings in that proceeding stating that
appellee was performing unauthorized direct motor carrier service which it had
not been authorized to perform by the original acquisition orders. The Division
further stated that appellee's original authorization had been limited to services
'auxiliary or supplementary' to the rail service of its parent. Because appellee
had acquired unconditional certificates, however, the Division did not enter an
order, but indicated that the acquisition proceedings would be reopened to
determine what, if any, conditions should be imposed in appellee's certificates.3
Subsequently, the Commission disapproved the Division's findings that
appellee had engaged in operations unauthorized by its certificates, but it stated
that the conditions, if any, which should be imposed would be considered in the
reopened proceedings.4

The reopened proceedings commenced on motion of the Division in 1945. All

parties to the proceeding were served with an examiner's proposed report based
on the records of the Commission. This report stated that the Commission had
approved appellee's acquisitions subject to the right to impose conditions to
assure that appellee's operations would be auxiliary or supplementary to the rail
service of its parent, but that such a reservation inadvertently had been omitted
from the certificates issued to appellee. The report proposed specific conditions
to effectuate the original purpose of the Commissioni.e., to assure that

appellee's services were solely 'auxiliary or supplementary.'

7

Appellee filed exceptions to the proposed report and requested hearings.

Thereupon, the Division reopened the proceedings for further hearings which
were held in 1946, after which the matter was referred to examiners for further
appropriate proceedings. In an exhaustive report, the examiners discussed the
history of appellee's operations and the circumstances surrounding the issuance
of the unconditioned certificates. They concluded that the certificates could not
authorize operations broader than those approved by the Commission in the
finance proceedings and that the certificates inadvertently had omitted relevant
restrictions. The Division, in its report, reviewed the Commission's
administrative procedures and practices and pointed out how the error probably
had occurred. It showed that certificates are prepared by a staff section of the
Commission which, after a prescribed lapse of time from the adoption of
reports or orders by the Commission authorizing the issuance of certificates,
inserts on mimeographed forms containing stock paragraphs the authority
described in the findings of the report. It further stated that, under the
Commission rules, this staff section has no discretion to alter anything
contained in the reports and is charged with the sole responsibility of
transposing the Commission findings into certificate form. Different action, if
any, which might be desired can only be taken by the Commission or a Division
through a formal supplemental report. The certificates are reviewed by a
supervisor, who is also without discretionary authority to make changes, and
are then issued. The Division reasoned that as no supplemental report had
issued between the conclusion of the finance hearings and the issuance of the
certificates, the staff section of certificates obviously had made an inadvertent
error in transposing the relevant findings.

The full Commission, after oral arguent, stressed another aspect of the matter in
affirming the action of the Division. In its view, the findings of the finance
proceedings which specifically authorized appellee's purchases, subject to the
stated limitations, could not be changed to eliminate such limitations without a
formal proceeding at which opponents of the unlimited application could be
heard. Each opinion within the Commission thus found that the omission from
the certificates of the stated reservations had been due to clerical inadvertence
which should be corrected. These corrections were ordered, and in addition
specified conditions were imposed consistent with the reservations.

Appellee, dissatisfied with the Commission's final order, commenced an action

before a specially convened three-judge District Court to have the order set
aside. 28 U.S.C. 2321 et seq., 28 U.S.C.A. 2321 et seq. Appellee argued,
and a majority of the court concluded, over a dissent of one of its members, that

under United States v. Watson Bros. Transportation Co., 350 U.S. 927, 76 S.Ct.
302, 100 L.Ed. 810, the Commission was without power to order modification
of the unconditional certificates issued to appellee. Further, the court held that
the record lacked substantial evidence to support the Commission finding that
the relevant restrictions were omitted from the certificates due to inadvertency.
Frisco Transportation Co. v. U.S., D.C., 153 F.Supp. 572. We disagree with
both of these conclusions.
I.
10

It is well settled that the Commission has the power to reserve in certificates
issued to a rail-affiliated motor carrier the right to impose specific conditions to
assure that the carrier's operations will be 'auxiliary or supplementary' to the
rail services of its affiliate. United States v. Rock Island Motor Transit Co., 340
U.S. 419, 71 S.Ct. 382, 95 L.Ed. 391.5 In that case a certificate, which
contained a reservation similar to the one at question here, was issued in 1941.

11

The reason for the reservation is obvious. Congress, in 5(2)(b) of the

Interstate Commerce Act, 49 U.S.C. 5(2)(b), 49 U.S.C.A. 5(2)(b),6 has
limited the acquisition of motor carrier franchises by rail carriers or their
affiliates to situations where the acquisition will enable the rail carrier to use
service by motor carrier to public advantage. The Commission has long
interpreted this mandate to confine such acquisitions to 'operations which are
auxiliary or supplementary to train service,' at least in the absence of special
circumstances which might justify less restricted operations. American
Trucking Ass'ns v. United States, 355 U.S. 141, 148, note 8, 78 S.Ct. 165, 169.
To accomplish this congressional purpose, the Commission can either state in
the certificate the conditions necessary to provide the limitation or reserve the
right to impose conditions should the necessity arise. United States v. Rock
Island Motor Transit Co., supra.

12

Here, as the record shows, appellee sought the right to carry on unrestricted
operations over all the routes which it was acquiring. In some instances, the
Commission approved unconditioned operations for reasons which do not
appear in the record. In others, however, including the four routes here at issue,
approval of only conditional service was granted. Such approval was consistent
with appellee's representations that acquisition of the routes would enable it to
give service which supplemented the operations of its rail-carrier parent. In
fact, the limited approval did not appear inconsistent with appellee's plans, for it
took no appeal from the Division report adopting the order of the Commission
examiner which clearly stated that the Commission reserved the right to impose
future conditions. And appellee consummated the proposed purchases within

thirty days of the Division report. Undoubtedly, therefore, at the time of the
finance proceedings, the Commission authorized limited operations on the
routes in question, to which appellee acceded.
13

Between two and four years later, the Commission issued certificates to
appellee which did not contain the reservation. The question arises, therefore,
whether the omission of the restrictions from the certificates was due to a
conscious policy choice on the part of the Commission or, as found by it, to
error in the administrative process of fashioning the certificates. Certainly a
conclusion must be based on one or the other of these alternatives because, as is
obvious from the findings of Division 5 as well as the full Commission, the
staff section of the Commission which prepared the certificates could not
exercise discretion in changing the findings, orders and authorizations
contained in the Commission reports.

14

The majority below concluded that the omissions resulted from a policy
change, and that the subsequent reopening of the proceedings and conditioning
of the certificates was an attempt to restrict appellee's operation on the basis of
newly developed policies. The record does not support this conclusion. The
District Court believed it significant that Division 5 only adopted the
recommendations of a hearing examiner rather than authoring approval orders
of its own. Additionally, the court found special meaning in the fact that one of
the certificates issued to appellee contained the relevant reservation while the
ones in issue did not.7 Further, the court viewed the issuance of unrestricted
certificates after the commencement of the related carrier proceedings in 1941
as especially important. Viewing these facts, the court refused to accept the
majority conclusion of inadvertence.

15

In our view, however, the Commission conclusion is well supported. First, we

see no special significance in the fact that Division 5 adopted, without
modification, the hearing examiner's recommendations. Under the practices of
the Commission, this is not unusual, see, e.g., 53 M.C.C. 97; 53 M.C.C. 117; 46
M.C.C. 328; and the hearing examiner's report made it clear that appellee's
operations were to be circumscribed. Second, there is nothing in the record or
in the dissenting opinions of the Commission to indicate that the Commission,
or a Division, or any Commissioner instructed the staff to delete the restrictions
and increase the scope of appellee's operations. This factor militates strongly in
favor of the Commission's conclusion that the reservations inadvertently were
omitted, particularly when it would have been improper for the Commission to
change its decision without notice to the protestants who had appeared before
the hearing examiner in opposition at the original finance proceedings and had
taken exception to at least one of the purchases. 49 U.S.C. 5(2)(b), 49

U.S.C.A. 5(2)(b); 5 U.S.C. 1004, 5 U.S.C.A. 1004. Cf. Federal

Communications Comm. v. National Broadcasting Co. (KOA), 319 U.S. 239,
63 S.Ct. 1035, 87 L.Ed. 1374. Third, the issuance of one restricted certificate is
not inconsistent with the Commission finding because, had the Commission
changed its policies, it likely would have treated the route there involved
similarly to the four routes in question. In fact, the issuance of this restricted
certificate really supports the conclusion that the others were not issued because
of a change of policy. Also, the Commission's exposition of its internal
procedures shows how the error could easily have occurred. Finally, as the
dissent below points out, at the time these certificates were issued, the staff
sections of the Commission normally dealt with certificates authorizing
unrestricted service by non-rail-affiliated motor carriers. The certificates issued
here were, therefore, unusual, and it is easy to see how the restrictions were
omitted. 153 F.Supp. 572, 578579. Under all these circumstances, the
conclusion of the Commission was compelled by the record.
16

Appellee complains that the Commission, or at least Division 5, improperly

took official notice of the internal administrative practices and procedures of
the Commission. The first full exposition of these procedures appeared in the
report of Division 5 in the reopened proceedings, although certain of them had
been mentioned in the hearing examiners' reports. Appellee claims that the
Commission had to disclose these procedures at the hearing so that it would
have a chance to rebut unfavorable inferences which might be drawn from
them. But we fail to see what prejudice could have accrued from taking official
notice of the practices, for appellee had adequate opportunity to rebut
inferences drawn from them on its argument to the full Commission. United
States v. Pierce Auto Freight Lines, 327 U.S. 515, 66 S.Ct. 687, 90 L.Ed. 821.
Particularly is this true where there is no showing that the procedures were
misstated to appellee's prejudice. This is not a case like Ohio Bell Telephone
Co. v. Public Utilities Comm., 301 U.S. 292, 57 S.Ct. 724, 81 L.Ed. 1093, or
United States v. Abilene & Southern R. Co., 265 U.S. 274, 44 S.Ct. 565, 68
L.Ed. 1016, where the 'facts' officially noticed were in doubt or controverted or
were discussed for the first time in the final decision of the Commission.

II.
17

The remaining question is whether the Commission has the power to modify
certificates issued due to inadvertence. This Court has, on one occasion,
reserved this question in a case where it determined that inadvertence was not
the reason for the failure to issue a proper certificate. United States v. Seatrain
Lines, 329 U.S. 424, 67 S.Ct. 435, 91 L.Ed. 396. And on another occasion, in
affirming the decision of a three-judge court, we ruled that the power, if any,

may only be exercised after proper opportunity for notice and hearing. United
States v. Watson Bros. Transportation Co., 350 U.S. 927, 76 S.Ct. 302, 100
L.Ed. 810.
18

It is axiomatic that courts have the power and the duty to correct judgments
which contain clerical errors or judgments which have issued due to
inadvertence or mistake. Gagnon v. United States, 193 U.S. 451, 24 S.Ct. 510,
48 L.Ed. 745. Rule 60(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A.,
recognizes this power and specifically provides that '(c)lerical mistakes in
judgments, orders or other parts of the record and errors therein arising from
oversight or omission may be corrected by the court at any time of its own
initiative or on the motion of any party and after such notice, if any, as the court
orders.' A similar power is vested in the Interstate Commerce Commission.
Section 17(3) of the Act creating the Commission, 49 U.S.C. 17(3), 49
U.S.C.A. 17(3), provides that: 'The Commission shall conduct its proceedings
under any provision of law in such manner as will best conduce to the proper
dispatch of business and to the ends of justice.' This broad enabling statute, in
our opinion, authorizes the correction of inadvertent ministerial errors. To hold
otherwise would be to say that once an error has occurred the Commission is
powerless to take remedial steps. This would not, as Congress provided, 'best
conduce to the ends of justice.' In fact, the presence of authority in
administrative officers and tribunals to correct such errors has long been
recognizedprobably so well recognized that little discussion has ensued in the
reported cases. Bell v. Hearne, 19 How. 252, 15 L.Ed. 614.8

19

Of course, the power to correct inadvertent ministerial errors may not be used
as a guise for changing previous decisions because the wisdom of those
decisions appears doubtful in the light of changing policies. Such was the case
in United States v. Seatrain Lines, supra, where it was apparent that the
Commission had not reopened prior proceedings to correct a mistake in the
issuance of a certificate but to execute a subsequently adopted policy. Cf.
Watson Bros. Transportation Co. v. United States, D.C.Neb., 132 F.Supp. 905,
affirmed 350 U.S. 927, 76 S.Ct. 302, 100 L.Ed. 810. To allow the reopening of
proceedings in such a case under the pretext of correction would undercut the
obvious purpose of 212 of the Interstate Commerce Act, 49 U.S.C. 312, 49
U.S.C.A. 312, which makes the issuance of a certificate the final step in the
administrative process. But nothing in that Section prohibits the correction of
inadvertent errors. Here, as we have shown, the certificates issued to appellee
mistakenly omitted an intended provision, and the Commission's subsequent
action was not the execution of a newly adopted policy but, as it found in a
proceeding in which appellants participated after notice, merely the correction
of the inadvertence.

20

The judgment of the District Court is reversed.

21

Reversed.

22

Mr. Justice WHITTAKER, believing that the evidence does not support the
Commission's finding that omission of restrictions from the four certificates of
convenience and necessity involved was due to mere inadvertent clerical errors
of the Commission's staff, would affirm the judgment of the District Court. 153
F.Supp. 572.

23

Mr. Justice STEWART took no part in the consideration or decision of these

cases.

The Motor Carrier Act of 1935, 213, 49 Stat. 556, conditioned acquisitions as
follows: 'Provided, however, That if a carrier other than a motor carrier is an
applicant, or any person which is controlled by such a carrier other than a
motor carrier or affiliated therewith within the meaning of section 5(8) of part I,
the Commission shall not enter such an order unless it finds that the transaction
proposed will promote the public interest by enabling such carrier other than a
motor carrier to use service by motor vehicle to public advantage in its
operations and will not unduly restrain competition.'

The Commission has long interpreted the language of 5(2)(b), quoted above,
to confine acquisitions of motor carriers by railroads or their affiliates to
operations which are auxiliary or supplementary to the train service of the
railroad. See American Trucking Ass'ns v. United States, 355 U.S. 141, 148, 78
S.Ct. 165, 169, 2 L.Ed.2d 158.

Campbell Sixty-Six Express, Inc., v. Frisco Transportation Co., 43 M.C.C. 641.

Campbell Sixty-Six Express, Inc., v. Frisco Transportation Co., 46 M.C.C. 222.

The appellants in Nos. 15 and 16, American Trucking Associations, Inc., and
Railway Labor Executives' Association, urge us to hold that the Commission
was without power to issue unconditioned certificates to appellee because of
the requirements of 5(2)(b) and, therefore, the certificates issued to appellee
were void. We have not had occasion to rule definitively whether that Section
states rigid requirements that operations of rail-affiliated motor carriers be
auxiliary or supplementary to train service. Cf. American Trucking Ass'ns v.
United States, 355 U.S. 141, 78 S.Ct. 165, 169. As resolution of the question is
unnecessary for the present decision, we intimate no position with regard to it.

See Motor Carrier Act of 1935, 213, 49 Stat. 556.

The reopened proceedings originally involved six routes. The certificate

coverning one of these contained a reservation of authority, and conditions
imposed in connection with that route are not at issue here. On another route,
the Commission's original approval was unconditional as was the certificate
issued in connection with it. The Commission has abandoned efforts to impose
new conditions on this route.

See also Davis, Administrative Law (1951), 600. And the agencies have
presumed the existence of such power. See Kenosha Auto Transport
CorporationInterpretation of Certificate, 53 M.C.C. 85; Petroleum Carrier
Corp. v. R. Q. Black, doing business as Superior Trucking Co., 51 M.C.C. 717;
Greyhound Corporation Extension of OperationsSlidell, La., 47 M.C.C. 103;
Santa Fe Trail Transportation Company Extension of OperationsNew
Mexico Points, 46 M.C.C. 775; Pan American Airways, Inc., North Atlantic
Route Amendments, 7 C.A.B. 849.